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Spotify’s New Royalty Model: Less Noise... but also Less Support for Indie Artists?

Spotify is changing its royalty model to combat streaming fraud and ensure that legitimate artists receive fair compensation for their work. The new model will include a minimum threshold of streams for a song to qualify for royalty payments, penalties for streaming fraud, and restrictions on royalty payments for short “noise” tracks.

- Based on articles by Tim Ingham in Music Business Worldwide (Oct 24, 2023), Abby Jones in Consequence of Sound and Evan Minsker in Pitchfork (Oct 25, 2023)

The changes are expected to take effect early next year and are aimed at addressing the issue of fraudulent streaming, which has been a growing problem in the music industry. By setting a minimum threshold of streams, Spotify hopes to prevent fraudulent streaming practices that artificially inflate the number of plays a song receives.

"When these 31-second tracks are all compiled into one playlist that a Spotify user might put on for, say, eight hours straight, they have the potential to garner some big bucks." - Abby Jones, Consequence of Sound

However, some critics argue that the new model could have unintended consequences. For example, it could lead to a situation where only the most popular artists receive significant royalties while smaller artists are left with little or nothing. Additionally, some have raised concerns that the new model could discourage experimentation and creativity in music by penalizing short “noise” tracks.

The United Musicians and Allied Workers union offered a reaction to today’s news. “Artists have solutions to fix streaming but Spotify isn’t listening,” the union shared on social media. “Instead they propose changes that will enrich the top of the pyramid even more, and make it even more impossible for working musicians to benefit from streaming.”

Despite these concerns, many in the music industry see the changes as a positive step forward. By cracking down on fraudulent streaming practices and ensuring that legitimate artists receive fair compensation for their work, Spotify is helping to create a more level playing field for musicians of all sizes.

In conclusion, Spotify’s new royalty model is an important development in the music industry. While there are valid concerns about its potential impact on smaller artists and experimental music, it represents an important step forward in the fight against fraudulent streaming practices and the promotion of fair compensation for all artists.


Summary by Microsoft's CoPilot AI


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